China’s macroeconomic trends in downward pressures: the ‘micro stimulus’ effects and steady growth

Liu, Yuanchun, Chen, Yanbin, Jiang, Yanqing and Zheng, Jinghai (2015) China’s macroeconomic trends in downward pressures: the ‘micro stimulus’ effects and steady growth. Journal of Chinese Economic and Business Studies, 13 (3). pp. 269-284. ISSN 1476-5284

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Abstract

This study reports China’s macroeconomic trends in downward pressures and discusses the effects of the ‘micro stimulus’ on the growth performance of Chinese economy. It appears that economic growth rebounds significantly in the short term every time ‘micro stimulus’ is applied, but the economy slows down again once the stimulus dwindles. China’s economic growth thus exhibits a pattern of significant ‘stimulus-dependence’. When facing economic downturn, China has only resorted to stimulus policy to sustain growth. Not surprisingly, our findings indicate that ‘micro stimulus’ cannot realize the strategic intent of growth stabilization and structural adjustment, and may even lead to more structural chaos. One problem that can be attributed to the near-sighted strategy is the worsening productivity performance since the financial crisis of 2008. Therefore both improvement in social security systems and social programs designed for maintaining long run growth are needed in order to improve productivity performance on the one hand and to facilitate structural adjustments on the other.

Item Type:	Article
Uncontrolled Keywords:	Chinese economy, stagnation, micro stimulus, productivity performance, economic growth, welfare economics, D6, E6, I3, O2
Subjects:	L100 Economics N100 Business studies T100 Chinese studies
Department:	Faculties > Business and Law > Newcastle Business School
Depositing User:	Ay Okpokam
Date Deposited:	01 Sep 2015 13:26
Last Modified:	19 Nov 2019 09:49
URI:	http://nrl.northumbria.ac.uk/id/eprint/23656

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